From big data to AI, the future of supply chain technology is already here. What barriers to emerging technology are preventing companies from adopting it and how can they be overcome?
The use of IT systems has become all pervasive within the supply chain arena. As new technologies become available, there is pressure in organisations to adopt them in order to deny rivals the chance to gain competitive advantage. This revolution is producing what seems like a constant wave of innovation, with its accompanying promises for increased performance across the entire supply chain.
Today, increased performance can look like anything from enhanced connectivity, improved decision-making and digitised supply chain EDI to big data insights and increased productivity. But the actual process of adopting new technologies can be complex territory for many businesses.
Cultural barriers to the adoption of future supply chain technology
Countless studies have shown that people are generally averse to change. World-leading research and advisory company Gartner identified people and culture as the biggest challenges to digital transformation. This attitude can extend across every level of a business, with Deloitte’s Global Chief Procurement Officer Survey reporting that 30% of respondents perceived limited senior stakeholder endorsement and prioritisation as the main barrier in the adoption of emerging technology. The potential impacts of this on the financial investment that said technology receives speaks for itself.
A recent report by ERIKS Industrial suggests this resistance is not limited to the C-suite. According to a research paper, 30% of engineers struggle to identify the benefits of adopting new digital technologies, revealing the importance of raising organisational awareness to achieve buy-in from employees at all levels and ensure a smoother uptake. Back to the C-suite, and educating the relevant stakeholders could empower them to make more innovative, forward-thinking decisions regarding technology investments in the first place.
Data integration poses another significant obstacle to adoption
Building agility in the supply chain is a key focus for most companies seeking to future-proof their processes. Access to real-time operational intelligence and predictive analysis are sure steps towards enabling this.
Today, data sources span back-end systems, trading partners, IOT devices such as machine sensors and RFID, and publicly available structured and unstructured data, all feeding reams of data back through a central ‘control tower’—but only if properly integrated, highlighting the growing requirement for new, increasingly technical skill sets. AI is another example of this; although the C-suite is increasingly recognising the potential applications of artificial intelligence technology in the supply chain, there persists a skills and expertise shortage across industry verticals.
Without integration, data is effectively invisible, revealing critical gaps in supply chain performance that could lead to poor decision-making and challenge future supply chain technology management. Case in point, 65% of the procurement leaders responding to Deloitte’s survey stated they had limited or no visibility beyond their tier 1 suppliers, while 20% also expressed concerns over information visibility, negatively impacting on businesses’ abilities to access relevant insights on demand.
The information security straitjacket
Unsurprisingly, many businesses report that security and compliance are their biggest barriers. In fact, 51% of respondents to Accenture’s Big Success with Big Data Survey claimed it was the main challenge to adopting digital technologies.
Heightened tensions around the security of customer data and proprietary company information is driving today’s engineers and developers to innovate tools and systems with security capabilities that meet customers’ increased expectations. In many cases, the most significant risk of breaches arises from the poor or incorrect deployment of the technology in the first place, reiterating the importance of hiring and developing teams equipped to implement and manage these requirements.
No roadmap is a barrier to emerging technology in itself
The successful implementation of new systems or processes requires close management, typically from a dedicated team, to navigate the complexities at the right costs and in an efficient way. Particularly in the case of technology adoption, roadmaps underpin this process, providing a framework from which the team can work to minimise gaps and guide them smoothly along the journey.
In many cases, new technology does not have these roadmaps in place. Without an established framework, digital adoptions into the supply chain can be complex and appear intimidating, even disruptive. This naturally prevents some businesses from taking the next step.
Future-thinking businesses focused on overcoming barriers to emerging technology can seek to learn from companies that are making the leap. Independent research into how other companies are managing the adoption can in some cases provide a baseline.
Sharing best practice has become a valuable commodity. As businesses become more open to the impacts of data sharing and smart cities, you might also find other supply chain directors willing to discuss their experiences with you firsthand.